According to Solly Sakal, owner of the franchise, the company plans to open a total of 60 stores within five years. The negotiations and signing of the contract with the international company were performed by Eran Gootfried of the Gootfried, Wassercug and Co. law firm.
The first shipment of merchandise is expected to arrive in Israel in February and the first stores are planned to open in March-April, 2011 in shopping centers and malls in Jerusalem, Haifa, Beersheba and Nazereth.
The stores will cover approximately 250 square meters (2,700 square feet) each, in accordance with the concept of the international company, and will sell shoes and accessories for the whole family. The brand will compete mostly with the To Go shoe store chain, which sells discount shoes.
Payless is a discount chain that offers shoes for the entire family. It sells shoes by American Eagle (whose clothes will be imported by the FOX Group), Champion, and designer collections such as Lela Rose for Payless, Christian Siriano for Payless, Isabel Toledo for Payless and others.
The chain is owned by Collective Brands with a yearly turnover of $3.3 billion ($2.8 billion from Payless). The chain was established in 1956 and today has 4,600 locations worldwide, including stores in the United States, Canada, Puerto Rico, the Caribbean, the Philippines and other countries.
The chain sells shoes at an average of $10-15. The prices in Israel will range from NIS 19 to NIS 199 ($5-50). “The price in Israel will include the price of the product abroad plus VAT,” explains Solly Sakal. “Our goal is to adopt the policy of the international chain and offer sale prices nine times a year.”
The Sakal Group will set up a subsidiary that will be responsible for opening the stores in Israel and operating them. “We expect to turn Payless into a leading player in the Israeli shoe market,” says Sakal. “We will provide our customers with fashion and quality at the best prices in the Israeli market.”
How will this activity impact Sakal’s volume turnover?
“When we complete the layout of the 60 stores, Sakal Sports turnover, which is NIS 250 million ($66 million) a year, will double. I believe in this step the company is taking. It is pleasure mixed with profit.”
How do you explain the many international brands coming to Israel?
“Until today, the Israeli market was not ready for it and the international companies showed no interest in Israel. The economic slowdown in the US caused American companies to open up to markets outside the US.
"Most of the Payless turnover, until recently, came from within the US, but today, due to the economic situation around the world, and the potential that lies in various countries, they decided to expand their operations and Israel is the first country they are entering in the Middle East.”
'10% of shoe market'
Sakal added that today there are many shopping malls and there is plenty of commerce space on offer. There is also an increase in sales in large stores.
“International companies entering Israel will change the retail market in Israel,” he said. “Brand names are opening bigger flagship stores. We can see it with Castro and FOX, and we are also enlarging our stores. H&M sell a lot although the store is very large, and that is because it provides a different type of experience.”
Sakal will invest NIS 600,000-700,000 ($160,000-185,000) at each location. “Within five years we will occupy 10% of the shoe market,” says Sakal. “We will purchase the merchandise directly from the factories in the Far East to save on expenses so we can offer our consumers good prices.”
Sakal Group is owned by the Brothers Solly and Meir Sakal. The company imports and markets a variety of international fashion brands, marketed in about 50 flagship stores including Timberland, Nautica, bebe, Keneth Cole, Polo Ralph Lauren, Guess and others. In addition, the company operates about 50 multi-brand stores – Emporium and Sakal Sports.
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